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Frankfurt DCI Report 2024: Data Centre Colocation, Hyperscale Cloud & Interconnection

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Frankfurt, Germany continues to be one of the largest data centre markets in Europe and the world. The current built-out capacity of the market was nearly 650MW in 2022 and is projected to climb to over 900MW by the end of 2024. This is a market that will be worth just over €2b in 2024 and is projected to grow at a 5-year CAGR of 19.4%. Hyperscale colocation is growing at a five-year CAGR of 26.1% and retail colocation is moving along at a 10.3% clip.

The underlying fundamentals of the Frankfurt market remain strong. Hyperscale clouds have built out significant footprints and the AZ architecture has solidified. Cloud adoption remains in its early stages, with uptake hindered by stringent data residency regulations and a generally conservative IT culture. But some of that is starting to loosen, with the pandemic shifting attitudes towards outsourcing, and data residency laws continuing to push demand for infrastructure that is in-country.

Demand is also being enhanced through the regulatory environment. EU and German regulations concerning energy efficiency in the data centre (measured by metrics such as PUE) are forcing legacy data centres to either upgrade or move to environments where they can be in compliance. The practical implications and economics favour the data centre colocation model. Frankfurt is also a market that has seen very little self-build activity. Hyperscale demand to this point has invariably gone into data centre colocation environments or build-to-suit arrangements. And while hyperscale is a driving force, the enterprise market is seeing forward progress, with a noticeable uptick in enterprise environments in the 0.25-0.5MW range.

The market is not without challenges. Supply chain pressures have eased and the peak of the energy crisis has passed but there continue to be constraints on power availability. Land in Frankfurt is also increasingly difficult to obtain. New regulations limit the future development of data centres to seven designated areas inside Frankfurt and this is pushing developments further away and outside what are increasingly established AZ clusters.

All of this means that Frankfurt may not end up being an AI hotbed. It is expected that AI training demand will land in other parts of Germany for the most part. Places like Berlin and the Cologne and Dusseldorf areas are seeing early signs of interest for large AI-oriented workloads, and do not have the same constraints as Frankfurt.

This report is an excellent resource for any service provider, investor or enterprise end user looking to understand and project the data centre market in Frankfurt or find a service provider. The methodology applied continues to be the most robust in the industry. We track supply on a space and power basis, split all the metrics along retail and hyperscale lines, and aggregate inventory in multiple tiers according to build status, absorption rates and maximum capacity levels. Hyperscale cloud nodes and on-ramps are mapped and a complete directory is provided.

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